World War III Has Started
The New War
The Holographic Universe
The Truth about WAR
The Embrace of Love
It's about oil, and profits for US companies
BUSH & KERRY
February 6 2003
I agree with Nelson Mandela. George Bush is a malevolent fool who is going to create unnecessary misery for the whole world.
But having said that, he is the representative of the dominant forces within the United States polity who are highly intelligent, have a clear view of what they want and how to get it and, I assume, genuinely believe what they are doing is in America's long-term interests.
In a nutshell, what they want is control of (not access to) Middle East oil in order to exert maximum leverage over Europe and Japan; and the destruction of OPEC as an effective cartel by replacing Saudi Arabia with Iraq as the swing producer to control world oil supply and prices.
This will allow the US to continue its profligate consumption of low-cost oil while giving it the freedom to deal with the seat of September 11 terrorism - which is in Saudi Arabia, not Iraq - without causing a global oil supply crisis.
At the same time, it will give the US access to oil reserves whose value is beyond the dreams of avarice for the mainly US-owned oil multinationals, who will once again vertically integrate the oil industry by retaking control of upstream activities from producer governments. At least that's the theory.
The US National Security Strategy released last September said that under the Bush Administration the military doctrine of "deterrence" would be replaced by the doctrine of "pre-emption", which means, in the case of Iraq, the policy of "containment" under United Nations authority is to be replaced by "proactive counter-proliferation".
At this stage the only constraint on this plan is US public opinion which, like public opinion in the rest of the Western world, is extremely reluctant to support a US or US-led invasion of Iraq without UN backing. Worldwide, public opinion is concerned that the war is about oil, not liberation. It is one thing for allied soldiers to die for freedom, it is quite another for soldiers and civilians to die to underwrite the profits of multinational oil companies.
Apologists for invasion or the threat of invasion have been at pains to argue that if the US wanted, there would be no problem about access to Iraqi oil, almost certainly at a price below the world price for most of the past decade.
Precisely. This would mean equal access for all. It would have also meant that French, German, Russian, Japanese and Chinese oil producers would have had direct access to the development of the massive Iraqi deposits and, at the very least, this would have given these countries a strategic economic independence from US.
The US interest in the Middle East is to tighten its grip on the region's oil, which gives it a veto over the industrial development of Europe, Russia and Japan.
Russia has oil, but it costs a lot to produce. Exploration and production costs are about $US10-$12 a barrel in most areas outside the Middle East, compared to about $US1 a barrel in the Middle East.
Unless OPEC can keep prices around $US18-$20 a barrel or Russia can keep its concession in Iraq, which it has negotiated with Saddam Hussein, Russia is likely to plunge into deep recession, given its dependence on oil for tax revenue and foreign exchange earnings.
According to a report published last week by the Worldwatch Institute, Iraq has failed in its gamble to get the UN to drop sanctions against Iraqi oil exports by offering concessions to France, Russia and China due to determined US and British opposition.
According to Worldwatch: "In the preface to the passage of the Security Council resolution 1441, there were thinly veiled threats that French, Russian and Chinese firms would be excluded from any future oil concessions in Iraq unless Paris, Moscow and Beijing supported the Bush policy of regime change."
Ahmed Chalabi, leader of the exiled opposition Iraqi National Congress, which is financed in part by US oil companies, has said he would not feel bound by contracts signed by Saddam and that "American companies will have a big shot at Iraqi oil" under a new regime.
The stakes are beyond imagination. According to a report for the Global Policy Forum, a think tank with consultative status at the UN, based on conservative assumptions of oil prices of $US25 a barrel and reserves of 250 billion barrels and a 50-50 profit split, yearly profits for the oil companies would run to $US29 billion a year - which is two-thirds of the $44 billion profits earned by the world's five major oil companies combined in 2001.
The costs are also beyond comprehension, but trivial compared to the prize, which is control of prospective oil fields capable of producing more than $US3000 billion of oil.
The last Gulf war cost America $US80 billion. George Bush senior was able to charge $62 billion of the cost to Saudi Arabia, Kuwait and Japan. The National Economic Council calculates Gulf War II could cost $US100-$200 billion depending on whether it lasts a few days or a few more days.
A study for the American Academy of Arts and Science agrees, but has developed a worst-case scenario in which the war spreads throughout the Middle East, which puts the cost at up to $US1900 billion.
It is a fair bet that whether best or worst-case scenarios eventuate, the real costs will not be paid by the US and European oil and armaments industries, which stand to gain most from an invasion of Iraq.
Kenneth Davidson is a staff columnist.
This story was found at: http://www.theage.com.au/articles/2003/02/05/1044318666539.html